Given the state of the market today it is becoming increasingly unusual to find a business of any size that does not accept credit cards. Even the smallest mobile business are accepting credit card payments given the decreased cost of mobile processing solutions. In addition, the internet makes it possible for any business to remain open and profitable around the clock with an ecommerce solution.
There are numerous companies offering small business credit card processing solutions. However, the level of service can very dramatically for one provider to another.
So, as a small business what considerations are necessary if you are ready to proceed with a credit card processing solution?
Considerations for selecting a small business credit card processing partner.
All credit card processing providers offer their service in exchange for a fee that is tied to the transactions completed by the merchant or business. These fees are made up of the following:
- Interchange – this is the fee changed by the bank that issued the credit card the customer is using to pay with. This fee is a fixed cost and cannot be negotiated. The fee or rate represents the wholesale price of accepting credit cards. The fee is made up of a percentage of the sale, as well as a per transaction cost.
- Association Dues and Assessments – these fees are charged by Visa, Master Card, Discover etc. and are also a fixed cost that can’t be negotiated.
- Interchange Markup or Margin – this is the additional cost the credit card processor adds on to the interchange, dues and assessments in order to make a profit. This fee is negotiable and is determined by the risk profile associated to the industry of the business seeking an account.
As a small business it is important to understand that you have the ability to negotiate the markup charged by the processor. It is also helpful to understand the different pricing structures for credit card processing.
While price is an important factor when choosing a provider there are also other elements that should be considered.
- Track Record – How long has the provider you are considering been in business? Ask for references if possible. Check the provider in the better business bureau. Also, check services like the rip off report.
- Merchant Agreement – Make sure you review the agreement carefully before signing to make sure you understand the agreement you are making.
- Network Compatibility – When looking to deploy the processing solution you want to make sure that the provider you select has adequate network compatibility to work with any existing equipment as well as future equipment.
- PCI DSS Compliance – The Payment Card Industry Data Security Standards are the rules set up by the federal government for the protection of card holder data. It is very important to select a provider that is PCI DSS compliant.
- Support – Some providers do not offer round the clock support. Additionally, it is common for most providers to outsource support overseas where it is difficult to get the proper level of tech support. There is nothing more aggravating than having an issue with your income and not getting the help you need.
We hope this is helpful as you consider small business credit card processing. If we can be of assistance please don’t hesitate to call our friendly staff at (800)917-8026.